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CHANNEL by Mind Map: CHANNEL

1. Funtion of marketing channels -facilitating the exchange process -adjusting for discrepancies in the market assortment -standardizing exchange transaction facilitates searchers by both sellers and buyers

2. Types of Marketing Channels

2.1. Marketing intermediary -organization that operates between producers and consumers

2.2. Resellers -whosalers -retailers -agents -facilitators

2.3. Service firm through short channels because they sell intangible products and need to maintain personal relationships within their channels

3. Determining Distribution Intensity

3.1. Intensive distribution -distribution product through all available channel

3.2. Selective distribution -distribution product thrpugh a limited number of channels

3.3. Exclusive distribution -distribution product through a single wholesaler or retailer in specific geographic region

4. Direct Selling

4.1. Direct channel -carries good directly from a producer to the business purchaser

4.2. Direct Selling -direct sales between producer and final user -important option for goods that require extensive demostrations in persuading customers to buy

5. Channels using marketing intermediaries

5.1. -producer to wholesaler to retailer to consumer -producer to wholesaler to business user -producer to agent to wholesaler to retailer to consumer -producer to agent to wholesaler to business user -producer to agent to business user

6. Contractual System -coordinates channel activities through formal agreements among channel members

6.1. Retail Cooperative -retailers establish a shared wholesaling operation

6.2. Franchise -a franchisee agrees to meet the operating requirements of a manufacturer

6.3. Effective logistics requires -proper supply chain management -control of the activities of purchasing, processing and delivery

6.4. Supply chain -begins with raw materials inputs for production -ends with the movement of final product to customers -

7. Major Transportation Modes

7.1. Railroads -most efficient ways for moving bulky commodities over long distances

7.2. Motor carries -relatively fast and consistent service -receives greater revenue per ton shipped -

7.3. Water carriers -include inland or barge lines -freight rates are based on the size of the vessel, cost of fuel and security measures

7.4. Pipelines -efficiently transports natural gas and oil

7.4.1. Advantages -low maintenance -dependable

7.4.2. Disadvantages -few location -relatively slow

7.5. Air freight -Declining in certain market sectors -firms are adapting

8. Warehousing

8.1. Storage warehouse -holds goods for moderate to long period to balance supply and demand

8.2. Distribution warehouse -assembles and redistributes goods, keeping them moving

8.3. automated warehouse technology -can cut distribution costs and improve customer service

8.4. Warehouse location -main influences on choice -

9. Inventory Control system -Just in time (JIT) -RFID techonolgy -Vendor managed inventory (VMI)

10. Radio Frequency Identification (RFID) -techonology that use a tiny ship with identification information that can be read by a scanner using radio waves from a distance -use to grant access to restricted areas

11. Logistic Cost Control -distribution function accounts for half of a firm total marketing costs -reexamining each link of their suply chains to identify activities

12. Physical Distribution -customer service -transportation -Inventory control -order processing -warehousing

13. Customer-service standards -state the goals and define acceptable performance for the quality of services -after these standards are defined, desingners assemble other physical distribution components to meet these standards at the lowest possible costs

14. Classes if carries

14.1. Common carriers -provide transportation services as hire carriers to public

14.2. Contract carries -for hire transporters that do not offer their services to public

14.3. Private carriers -provide transportation services solely for internally generated freight

15. Factors influencing Marketing Channel Startegies

15.1. Markets Factors

15.1.1. Short Channels -business users -geographically concentrated -large orders

15.1.2. Long channel -Consumers -geographically dispersed -small orders

15.2. Products Factors

15.2.1. Short channel -perishable -complex -expensive

15.2.2. Long Channles -durable -standardized -inexpensive

15.3. Organizational Factors

15.3.1. Short channel -broad product line -channel control important

15.3.2. Long channel -limited product line channel control not important

15.4. Competitive factors

15.4.1. Short Channel -manufacturer feels satisfied with marketing intermediaries performance in promoting product -

15.4.2. Long channel -manufacturer feels dissatisfied with marketing intermediaries performance in promoting product

16. Legal problems of exclusive distribution

16.1. Exclusive dealing agreement -prohibits a marketing intermediary from handling competing products

16.2. Closed sales territories -restrict their distributors to certain geographic regions

16.3. Typing agreements -allow channel members to become exclusive dealers if they carry product other than those that they want to sell

17. Channel Mangement and leadership

17.1. Channel captain -dominant and controlling member of a marketing channel

18. Channel Conflict

18.1. Horizontal conflict -disagreement among channel members at the same level

18.2. Vertical conflict -occurs among members at different levels of the channel

18.3. The gray market -goods produced for overseas markets

19. Vertical Marketing system

19.1. -designed to improve distribution efficiency and cost-effectiveness

19.2. Benefits -improve chances for controlling and coordinating the steps in the distribution or production process leading to greater efficiency of channels -lead to develop economic of scale -let a manufactur expand into profitable new business

19.3. Disadvantage -involves some costs -marketers lose some flexibility